Hospitals, Health System Beat Cost Benchmark (by a Wide Margin)

Each year the state’s Health Policy Commission (HPC) sets a target for per-capita healthcare spending throughout Massachusetts and then tracks the components of the healthcare system to see if the state can meet the goal.  For 2017, the goal was 3.6% growth. Overall actual growth was 1.6% – or 2 full percentage points below the target, according to an HPC presentation last Thursday.

That 1.6% total healthcare spending growth rate in Massachusetts was well below the national rate (3.9%). 

Hospital outpatient spending grew 4.9% in 2017, down from a 5.6% growth rate the year before.  The other higher-than-benchmark category was pharmaceuticals, which had a 4.1% growth rate in 2017. The growth rate in hospital inpatient spending was just 1% in 2017, down from 2.8% the year before.  That is, the trend shows that spending for both inpatient and outpatient hospital care is dropping in the state. 

The HPC presentation also showed that commercially insured residents experienced a sharp increase in out-of-pocket spending between 2015 and 2017; the per-year cost of such spending was $1,733 in 2016 and rose 23% to $2,131 in 2017. (Out-of-pocket spending is defined as the amount of healthcare costs a person paid in the past 12 months that was not covered by any insurance or special assistance.)

The HPC found that after the formation of Beth Israel Lahey Health, the top five health systems will account for 70% of all commercial inpatient stays statewide. Those systems are Partners HealthCare, Beth Israel Lahey Health, UMass Memorial Health Care, South Shore Health, and Wellforce.